Buyer Lines Up for BofA's Half of Namesake Tower

SAN FRANCISCO-A New York investment group that includes David Werner and Mark Karasick is under contract to acquire Bank of America’s 50% stake in the 1.8-million-sf Bank of America Center here for upward of $400 million, sources close to the transaction tell GlobeSt.com. Locally based Shorenstein Co. owns the other half of the building and says it has no plans to sell its stake at this time.The recapitalization of the partnership includes a refinancing of the debt on the building, which sources tell GlobeSt.com is in the $700-million range. BofA has exercised an option to be the lender, which means the bank is essentially shifting its position in the building from equity to debt, sources tell GlobeSt.com. The transactions are scheduled to close in about 60 days. Last month, GlobeSt.com reported that while estimates on the potential value of the building vary wildly–from $375 per sf to nearly $600 per sf–most are putting the value somewhere between $400 and $500 per sf. At $405 million, the purchase price for half the building equates to $450 per sf.BofA and Shorenstein tried to sell the tower in late 2000 at the height of the dot-com real estate boom but the property was never tied up. At that time, estimates were that the building could sell for as much as $1 billion, or $555 per sf. Since that time, the market has been moving steeply downward, with annualized rents sliding from a high of $80 per sf into the $30s on average and premier product like BofA Center commanding rents closer to $40 per sf.